Wall Street rebounded sharply on a paring back of negative risk sentiment that was really led by bond markets as yields retreated in the lead up to tonights ECB meeting. US stocks lifted nearly 2% across the board, with the USD finally retreating after being uber strong for very long, as Euro got back above parity while the Aussie dollar remains on the ropes. 10 year Treasuries fell back only marginally from their three month high at the 3.2% level with the next Fed meeting expectations still counting on a 75bps rise. Crude oil saw another big flop with Brent crude down more than 5% to retreat below the $88USD per barrel level while gold rebounded slightly to return to just above the $1717USD per ounce level.
Looking at share markets in Asia from yesterday’s session, where Chinese share markets are having a pause with the Shanghai Composite basically unchanged at 3246 points while the Hang Seng Index is still in sell mode, down 2% at one stage before recovering to only lose 0.8% to finish at 19044 points. The daily chart remains in a very bearish mood here with daily momentum extremely oversold and price action at the lower edge of the moving average channel as price action falls below the May lows. This could be a bit too over extended and may result in a sharp swing rally soon:
Japanese stock markets joined in with the sell party, with the Nikkei 225 closing 0.7% lower at 27430 points. The daily chart is still showing a considerable dip below the trailing ATR support level at the 28000 point area which had been firm since the breakout in early August but is now turning into resistance. Daily momentum continues to dive with oversold readings and without any help from a very weak Yen. Futures however are suggesting more upside potential here as the 27000 point level turns into support, so watch closely for it to be defended:
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